On Friday, April 16, 2010 Oracle (ORCL) announced that it would pay $685 million to acquire Phase Forward Incorporated (PFWD) and integrate it into the Oracle Health Sciences Global Business Unit. This seems to be a carefully considered strategy to dominate clinical development software and provide a one stop superstore of this software when integrated with the previous acquisitions by Oracle of Siebel and its eClinical Suite as well as Relsys a key provider of drug safety and risk management solutions with advanced analytics for the life sciences industry. This may very well be the oft described clinical ecosystem that many senior Pharmaceutical R&D executives have been seeking a way to improve efficiencies and lower costs.
This acquisition does not come cheap—a premium of 30% over the prior day market price and a price that represents over 3.1 times 2009 revenues of $213 million or an astonishing 61 times net profit of $11.2 million-suggests that Oracle sees significant synergies in its product lines.
In our opinion this is a win-win combination for Oracle and Phase Forward since the extraordinary marketing power that Oracle brings should boost Phase Forward Sales while the Phase Forward products fill in significant gaps that Oracle has. Additionally, the concept of Software as a Service (SAAS) has been furthered within Oracle based on Phase Forward's Integrated Clinical Research Suite (ICRS) which could be the glue between Siebel eClinical and the Relsys Product Suites. The possibility of a full service “cloud computing” offering is a distinct possibility in our thinking. The challenge of seamless integration of all this can be problematic and articulation of the value proposition to their clients will need to be clearly defined.
The other questions left to ponder is what will key competitors such as Microsoft and SAP do to be competitive in this space and what acquisitions will come next. One further issue to consider is the enormous potential for consulting and support services and what moves the market leaders (IBM, Accenture, TCS, Infosys, Capgemini, etc.) and more specialized players will do to garner parts of this business.
Saturday, April 17, 2010
Sunday, April 4, 2010
Myriad Genetics – A Sign of the Future?
I’m going to step away from my recent blogs about the Patient Protection and Affordable Care Act because I think time is needed to see what happens next and there is so much else to blog about in life sciences these days. And, thanks to Federal judge Robert Sweet of the U.S. Circuit Court in New York City, I’ve got a great topic for this blog.
You may have heard about this one already. Seems that Judge Sweet threw out the practice of patenting human genes by invalidating patents held by Myriad Genetics (MYGN) relating to breast and ovarian cancer. The American Civil Liberties Union (ACLU), the American Medical Association (AMA), the March of Dimes, and a slew of other interested parties got together and ganged up on Myriad. Talk about having a bad day. Obamacare’s passing probably didn’t make the mood at Myriad’s headquarters any better. (See Scott Canon’s article at The Kansas City Star for a very comprehensive summary http://www.kansascity.com/2010/04/02/1853748/court-ruling-puts-human-gene-patenting.html .) While I may be over-dramatizing a bit here, I suspect that the emotional issue of access to affordable women’s health care probably contributed to Myriad’s misfortunes. Also, Myriad’s lack of a legal war chest as compared to more deep pocketed bio-tech players probably didn’t hurt either.
Given the American Idol winner-take-all nature of the U.S. legal system, we’re far from a final verdict here until we finish with the U.S. Supreme Court. (Listen to or read the interview between National Public Radio’s (NPR) Ira Flatow and Dr. Robert Cook-Deegan for more information on this aspect of the story http://www.npr.org/templates/story/story.php?storyId=125502332 .) Until then, there will be uncertainty in the bio-tech industry. For about two decades, there has been an assumption that human genes could be patented just like any other good idea. The little exception about naturally occurring substances didn’t seem to bother anyone except those dismissed as marginal extremists or socialists.
Well, guess what? Looks like the extremists and socialists weren’t so marginal after all. What we may be seeing here is a fundamental shift in how this country views, not all only healthcare, but fundamental research and science as well. Maybe the recent financial meltdown which many view as the result of greedy investment bankers on Wall Street has caused people to be doubtful of free market solutions for important matters like healthcare and who owns intellectual property like the human genome. I’d like to point out how in the final push for the passage of healthcare reform, supporters took aim on healthcare insurers. Rather effectively, too, I might add.
As for Myriad, check out Adam Feuerstein’s blog on TheStreet.com (http://www.thestreet.com/story/10715426/1/biotech-stock-mailbag-myriad-genetics.html?cm_ven=GOOGLEFI ) for a financial overview of the company and its market value. This will be a company and a topic that we’ll becoming back to a lot in the future.
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
You may have heard about this one already. Seems that Judge Sweet threw out the practice of patenting human genes by invalidating patents held by Myriad Genetics (MYGN) relating to breast and ovarian cancer. The American Civil Liberties Union (ACLU), the American Medical Association (AMA), the March of Dimes, and a slew of other interested parties got together and ganged up on Myriad. Talk about having a bad day. Obamacare’s passing probably didn’t make the mood at Myriad’s headquarters any better. (See Scott Canon’s article at The Kansas City Star for a very comprehensive summary http://www.kansascity.com/2010/04/02/1853748/court-ruling-puts-human-gene-patenting.html .) While I may be over-dramatizing a bit here, I suspect that the emotional issue of access to affordable women’s health care probably contributed to Myriad’s misfortunes. Also, Myriad’s lack of a legal war chest as compared to more deep pocketed bio-tech players probably didn’t hurt either.
Given the American Idol winner-take-all nature of the U.S. legal system, we’re far from a final verdict here until we finish with the U.S. Supreme Court. (Listen to or read the interview between National Public Radio’s (NPR) Ira Flatow and Dr. Robert Cook-Deegan for more information on this aspect of the story http://www.npr.org/templates/story/story.php?storyId=125502332 .) Until then, there will be uncertainty in the bio-tech industry. For about two decades, there has been an assumption that human genes could be patented just like any other good idea. The little exception about naturally occurring substances didn’t seem to bother anyone except those dismissed as marginal extremists or socialists.
Well, guess what? Looks like the extremists and socialists weren’t so marginal after all. What we may be seeing here is a fundamental shift in how this country views, not all only healthcare, but fundamental research and science as well. Maybe the recent financial meltdown which many view as the result of greedy investment bankers on Wall Street has caused people to be doubtful of free market solutions for important matters like healthcare and who owns intellectual property like the human genome. I’d like to point out how in the final push for the passage of healthcare reform, supporters took aim on healthcare insurers. Rather effectively, too, I might add.
As for Myriad, check out Adam Feuerstein’s blog on TheStreet.com (http://www.thestreet.com/story/10715426/1/biotech-stock-mailbag-myriad-genetics.html?cm_ven=GOOGLEFI ) for a financial overview of the company and its market value. This will be a company and a topic that we’ll becoming back to a lot in the future.
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
Sunday, March 28, 2010
Healthcare Reform: Now What?
The Patient Protection and Affordable Care Act has passed. Twice. Healthcare reform, sought after since Teddy Roosevelt, has arrived in the United States. Now what?
The run up to this historic (I don’t use that word often or lightly) moment began maybe a year before the 2008 Presidential election and supplied increasingly higher drama as the election receded into the past and the first year of the Obama administration progressed. Everyone seemed to be caught up in the debates that were taking place in Washington, D.C.. Well, the legislation has passed and as President Obama said, ‘Armageddon didn’t occur, nothing fell from the sky on me, and it turned out to be a pretty nice day’. But, not all the bill’s provisions happen right away. Some of its key provisions don’t occur until 2014, for example, prohibiting excluding healthcare insurance coverage because of preexisting conditions by insurers. Others won’t kick in until 2018, coverage of preventative procedures and examinations without copayment requirements as another example. (See the Wikipedia article on the bill for a summary of the bill, http://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act .)
I expect that some time will need to pass before we’ll begin to understand what happens out there with this legislation. Yes, more people will be covered and that’s good for healthcare companies. But, as I’ve blogged before, the government and insurance companies will eventually use their enormous purchasing power to keep costs down. The conservatives’ concerns over rationing of healthcare may have some basis for these fears. After all, how many neurosurgeons are there in the country? More basic services may not be as affected but there could be some disruptions to the provision of care in the early days.
Could Patient Protection and Affordable Care Act provide a stimulus to the economy? Possibly. More facilities and care providers will be needed. The population is aging and the Baby Boomers will be around requiring care for about another forty years or so. With the funding model being worked out, there’s a reasonable chance that this will be positive for the economy. I use the U.S. Interstate Highway System proposed by President Eisenhower as an example of the indirect benefits of government legislation.
Possible winners from healthcare reform are the outsourcers. Taylor Barnes (http://taylorkbarnes.wordpress.com/home/ ) has written an interesting article for the Christian Science Monitor that is available on Yahoo! News (http://news.yahoo.com/s/csm/20100325/wl_csm/290215 ) about Indian outsourcers and the potential for new business for them. I’ll return to this particular point in the future because it’s part of the whole healthcare story that Larry and I have been following.
Likewise, we’ll be blogging and inviting others to join us as this story continues to unfold. We won’t be lacking material.
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
The run up to this historic (I don’t use that word often or lightly) moment began maybe a year before the 2008 Presidential election and supplied increasingly higher drama as the election receded into the past and the first year of the Obama administration progressed. Everyone seemed to be caught up in the debates that were taking place in Washington, D.C.. Well, the legislation has passed and as President Obama said, ‘Armageddon didn’t occur, nothing fell from the sky on me, and it turned out to be a pretty nice day’. But, not all the bill’s provisions happen right away. Some of its key provisions don’t occur until 2014, for example, prohibiting excluding healthcare insurance coverage because of preexisting conditions by insurers. Others won’t kick in until 2018, coverage of preventative procedures and examinations without copayment requirements as another example. (See the Wikipedia article on the bill for a summary of the bill, http://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act .)
I expect that some time will need to pass before we’ll begin to understand what happens out there with this legislation. Yes, more people will be covered and that’s good for healthcare companies. But, as I’ve blogged before, the government and insurance companies will eventually use their enormous purchasing power to keep costs down. The conservatives’ concerns over rationing of healthcare may have some basis for these fears. After all, how many neurosurgeons are there in the country? More basic services may not be as affected but there could be some disruptions to the provision of care in the early days.
Could Patient Protection and Affordable Care Act provide a stimulus to the economy? Possibly. More facilities and care providers will be needed. The population is aging and the Baby Boomers will be around requiring care for about another forty years or so. With the funding model being worked out, there’s a reasonable chance that this will be positive for the economy. I use the U.S. Interstate Highway System proposed by President Eisenhower as an example of the indirect benefits of government legislation.
Possible winners from healthcare reform are the outsourcers. Taylor Barnes (http://taylorkbarnes.wordpress.com/home/ ) has written an interesting article for the Christian Science Monitor that is available on Yahoo! News (http://news.yahoo.com/s/csm/20100325/wl_csm/290215 ) about Indian outsourcers and the potential for new business for them. I’ll return to this particular point in the future because it’s part of the whole healthcare story that Larry and I have been following.
Likewise, we’ll be blogging and inviting others to join us as this story continues to unfold. We won’t be lacking material.
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
Sunday, March 21, 2010
Healthcare Reform: Endgame?
Finally. We seem to moving to closure on the seemingly unending national debate over healthcare in the U.S.. Tomorrow, Sunday, March 21, 2010, in an unusual Sunday session, the U.S. Congress will put healthcare reform to the vote. I predict that the Democrats will get the necessary votes and the legislation will pass. Then it’s over and we can all go home, right?
We may all go home but this is far from over. Let’s not forget that august body, the U.S. Senate which would still need to put its imprimatur on the proposed legislation. The Republicans are preparing a desperate, last ditch defense there that would make John Wayne’s Alamo look like a tea party (and I don't mean the one in Boston Harbor nor the current anti-Republican/Democrat Party) If the Senate can’t pass the legislation before the spring recess we could be in this state of affairs for a while longer. (Am I the only one who’s reminded of Waiting for Godot?) Various governors and state legislatures are promising to challenge the constitutionality of government mandated healthcare reform. Their positions are based on the old states’ rights arguments. (Somebody should tell those guys that those arguments didn’t work very well for the Confederacy.)
CNBC’s Patti Domm wrote a piece (http://www.cnbc.com/id/35956840 ) yesterday about the potential short term negative impact of healthcare reform on stack prices. I’m still convinced that most people still unsure about what healthcare reform means for business, especially in the life sciences sector. I’m excluding the Republicans and Tea Party members from this because they’re just opposed in general to the whole idea.
Tomorrow, we may have the unusual situation of most of the country sitting around their televisions, computers, PDA’s, whatever to follow the final debates in the Congress. I can’t wait to see the audience ratings. (Another prediction, they may rival the recent Olympics.)
After all that has gone on before now, the present moment seems somewhat anticlimactic. If the past is any guide even if the legislation passes not much may change immediately. But, changes will be put into play that combined with the law of unintended consequences will change many things. (Nobody ever thought that when Congress put through a minor piece of legislation for something called a 401k plan would become the primary financial tool for retirement planning and practically shut down employer funded pensions as generations knew them.) What will we wake up to on Monday morning if healthcare reform passes?
No one knows what the future holds for healthcare reform. I can predict passage but that’s just one person’s opinion. But, passage is just one point in time. It’s binary – yes or no. What happens after that is much more complicated and the stakes are very high. Let’s see what happens.
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
We may all go home but this is far from over. Let’s not forget that august body, the U.S. Senate which would still need to put its imprimatur on the proposed legislation. The Republicans are preparing a desperate, last ditch defense there that would make John Wayne’s Alamo look like a tea party (and I don't mean the one in Boston Harbor nor the current anti-Republican/Democrat Party) If the Senate can’t pass the legislation before the spring recess we could be in this state of affairs for a while longer. (Am I the only one who’s reminded of Waiting for Godot?) Various governors and state legislatures are promising to challenge the constitutionality of government mandated healthcare reform. Their positions are based on the old states’ rights arguments. (Somebody should tell those guys that those arguments didn’t work very well for the Confederacy.)
CNBC’s Patti Domm wrote a piece (http://www.cnbc.com/id/35956840 ) yesterday about the potential short term negative impact of healthcare reform on stack prices. I’m still convinced that most people still unsure about what healthcare reform means for business, especially in the life sciences sector. I’m excluding the Republicans and Tea Party members from this because they’re just opposed in general to the whole idea.
Tomorrow, we may have the unusual situation of most of the country sitting around their televisions, computers, PDA’s, whatever to follow the final debates in the Congress. I can’t wait to see the audience ratings. (Another prediction, they may rival the recent Olympics.)
After all that has gone on before now, the present moment seems somewhat anticlimactic. If the past is any guide even if the legislation passes not much may change immediately. But, changes will be put into play that combined with the law of unintended consequences will change many things. (Nobody ever thought that when Congress put through a minor piece of legislation for something called a 401k plan would become the primary financial tool for retirement planning and practically shut down employer funded pensions as generations knew them.) What will we wake up to on Monday morning if healthcare reform passes?
No one knows what the future holds for healthcare reform. I can predict passage but that’s just one person’s opinion. But, passage is just one point in time. It’s binary – yes or no. What happens after that is much more complicated and the stakes are very high. Let’s see what happens.
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
Tuesday, March 16, 2010
Healthcare Reform: Watching Paint Dry
I’m fascinated by the healthcare reform debate that’s currently underway in the U.S. both inside the Houses of Congress and without. Last week, everyone in the country became experts in the arcana of the Senate’s reconciliation rules. This week, we’re all becoming familiar with President Obama’s travel schedule. Oh, and, let’s not forget the furies that have been unleashed at the health insurance providers. (I loved that move on the part of the President. A friend of mine who is a rabid opponent of healthcare reform rallied to that one. As he said, “Who doesn’t hate the health insurance companies?”)
The absence of Big Pharma from this debate is obvious. As I blogged last week, they appear to be in the President’s camp but their silence is deafening. Given all that’s at stake here I find that response, or, more accurately, lack of one, puzzling.
Maybe, just maybe, healthcare reform is not all that it’s knocked up to be for Big Pharma. The argument advanced by some (see Janet Adamy’s and Greg Hitt’s article in the Wall Street Journal, http://online.wsj.com/article/SB125590875879693189.html?mod=rss_whats_news_us ) that the drug companies will profit from all the sales to customers who couldn’t afford their wares reg Hitt, previously. That assumes Big Pharma has something to sell. This blog has noted previously the struggling new product pipelines at many drug companies. Now, the generic manufacturers may have something to crow about but I doubt their more upscale brethren will.
OK, you don’t buy the drying up pipeline argument. You say that new product development is not a straight line always headed up. You believe that research and development is a fitful, creative process with long dry spells frequently the result. I buy that. There is historical precedent. Now, let’s stop and think who’s going to be footing the bill for all this. The Federal government and the insurance companies. Am I the only one who thinks that these august institutions won’t figure out a way to squeeze volume purchase discounts from the drug companies? The drug companies are doing it to their own suppliers and even their own employees. Or, the Federal government could fall back on their old standard – price controls.
Here’s where I’m going with this. I don’t believe that healthcare reform will be beneficial to Big Pharma and other life sciences companies. Yes, more products may be sold to more people but at lower prices. Doctors will probably be second guessed over treatments. Stories have been around for years of nurses paid by health insurers second guessing physicians over treatments and medications. These practices will only continue and grow in all likelihood.
I’ve stuck my neck out now and given my position. There may be a vote on healthcare reform in the next week. If it passes, and the jury’s still out on this one, then I think we’ll see an interesting time for Big Pharma in the next several months.
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
The absence of Big Pharma from this debate is obvious. As I blogged last week, they appear to be in the President’s camp but their silence is deafening. Given all that’s at stake here I find that response, or, more accurately, lack of one, puzzling.
Maybe, just maybe, healthcare reform is not all that it’s knocked up to be for Big Pharma. The argument advanced by some (see Janet Adamy’s and Greg Hitt’s article in the Wall Street Journal, http://online.wsj.com/article/SB125590875879693189.html?mod=rss_whats_news_us ) that the drug companies will profit from all the sales to customers who couldn’t afford their wares reg Hitt, previously. That assumes Big Pharma has something to sell. This blog has noted previously the struggling new product pipelines at many drug companies. Now, the generic manufacturers may have something to crow about but I doubt their more upscale brethren will.
OK, you don’t buy the drying up pipeline argument. You say that new product development is not a straight line always headed up. You believe that research and development is a fitful, creative process with long dry spells frequently the result. I buy that. There is historical precedent. Now, let’s stop and think who’s going to be footing the bill for all this. The Federal government and the insurance companies. Am I the only one who thinks that these august institutions won’t figure out a way to squeeze volume purchase discounts from the drug companies? The drug companies are doing it to their own suppliers and even their own employees. Or, the Federal government could fall back on their old standard – price controls.
Here’s where I’m going with this. I don’t believe that healthcare reform will be beneficial to Big Pharma and other life sciences companies. Yes, more products may be sold to more people but at lower prices. Doctors will probably be second guessed over treatments. Stories have been around for years of nurses paid by health insurers second guessing physicians over treatments and medications. These practices will only continue and grow in all likelihood.
I’ve stuck my neck out now and given my position. There may be a vote on healthcare reform in the next week. If it passes, and the jury’s still out on this one, then I think we’ll see an interesting time for Big Pharma in the next several months.
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
Sunday, March 7, 2010
Healthcare Reform: Reconciliation?
I have to admit to being a bit distracted lately in my blogging because of the recent debates over healthcare reform. (Actually, Larry’s been politely suggesting that I get back on track about Big Pharma.) Here’s my dilemma – I’m not really sure what happens next. Now, coming from someone as highly opinionated as myself this is something.
President Obama’s announcement this week that he expects the Congress to push through healthcare reform despite Republican opposition. Larry Kudlow called this a “declaration of war” on the National Review’s website (http://article.nationalreview.com/427062/one-giant-government-leap-backwards/larry-kudlow ) this week. The Democrats will probably be forced to use an arcane legislative rule called reconciliation to make this happen. The seemingly unending gridlock in Washington, D.C. may be coming to an end one way or the other. The whole country, if not the world, will be on the edge of its seat for several more weeks until this is over. And, then, then the next round begins.
What can anyone make of this? More to the point, how does Big Pharma or any of the other players in the healthcare industry plan around this? And, let’s not forget all the other problems that Big Pharma is facing – poor new product pipelines, increasing competition from generics, and more aggressive FDA enforcement.
Consensus doesn’t seem to exist on whether or not passage of healthcare reform will be good or bad for Big Pharma. While Big Pharma still seems to be in the President’s camp supporting healthcare reform, I’m still looking for a simple, cogent argument about why healthcare reform is good for Big Pharma. (If any of our readers would refer me to any such links, I’ll be forever in your debt.) Likewise, while gloom and doom prognosticators abound about the impact of healthcare reform on Big Pharma, no one seems to have a straightforward analysis of why.
Now, maybe the problem is the state of the healthcare reform legislation itself. The Senate bill is supposedly about 2,700 pages. I guess trying to sort all the possible implications is a bit daunting.
Or, maybe, just maybe, the healthcare reform debate is irrelevant to Big Pharma. Why do I say that? Not just to be provocative. (OK, OK, I do want to be provocative.) When there’s a lack of consensus, no obvious ways forward, something’s going on. Sure, healthcare reform will change many things but does it mean that the fundamentals of Big Pharma’s business will necessarily change? I’m beginning to think not.
Sure, Big Phama has many issues and challenges to deal with. But, their businesses which have grown to their current size and power by learning to respond to these. Healthcare reform may only be a distraction from the real problems which Big Pharma is facing.
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
President Obama’s announcement this week that he expects the Congress to push through healthcare reform despite Republican opposition. Larry Kudlow called this a “declaration of war” on the National Review’s website (http://article.nationalreview.com/427062/one-giant-government-leap-backwards/larry-kudlow ) this week. The Democrats will probably be forced to use an arcane legislative rule called reconciliation to make this happen. The seemingly unending gridlock in Washington, D.C. may be coming to an end one way or the other. The whole country, if not the world, will be on the edge of its seat for several more weeks until this is over. And, then, then the next round begins.
What can anyone make of this? More to the point, how does Big Pharma or any of the other players in the healthcare industry plan around this? And, let’s not forget all the other problems that Big Pharma is facing – poor new product pipelines, increasing competition from generics, and more aggressive FDA enforcement.
Consensus doesn’t seem to exist on whether or not passage of healthcare reform will be good or bad for Big Pharma. While Big Pharma still seems to be in the President’s camp supporting healthcare reform, I’m still looking for a simple, cogent argument about why healthcare reform is good for Big Pharma. (If any of our readers would refer me to any such links, I’ll be forever in your debt.) Likewise, while gloom and doom prognosticators abound about the impact of healthcare reform on Big Pharma, no one seems to have a straightforward analysis of why.
Now, maybe the problem is the state of the healthcare reform legislation itself. The Senate bill is supposedly about 2,700 pages. I guess trying to sort all the possible implications is a bit daunting.
Or, maybe, just maybe, the healthcare reform debate is irrelevant to Big Pharma. Why do I say that? Not just to be provocative. (OK, OK, I do want to be provocative.) When there’s a lack of consensus, no obvious ways forward, something’s going on. Sure, healthcare reform will change many things but does it mean that the fundamentals of Big Pharma’s business will necessarily change? I’m beginning to think not.
Sure, Big Phama has many issues and challenges to deal with. But, their businesses which have grown to their current size and power by learning to respond to these. Healthcare reform may only be a distraction from the real problems which Big Pharma is facing.
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
Sunday, February 28, 2010
Healthcare Reform: What Did We Learn from the Healthcare Summit?
OK, President Obama trooped everybody into Blair House the other day and I don’t know what he was expecting to achieve but unless he’s a lot more cynical than he’s letting on, I don’t think he got what he wanted.
I caught some of the U.S. Healthcare Summit on the evening news and I found it worrying for three principle reasons. First, the theatricality of it all was discouraging. I lost track of the number of copies of proposed healthcare legislation that had been trucked into the conference room by the Republicans to make some point or other. (I wonder if the environmentalists will calculate how many trees were killed to make those points.) Next, the lack of seriousness by many of the participants seemed obvious to me. Yes, there were many pious sounding talking points and other sound bites but too many participants were there only to be seen in front of the cameras. Finally, the lack of any obvious solution or solutions was apparent to me. There seemed to be even a lack of agreement as to what the problem is. Overall, President Obama’s Healthcare Summit, however well intentioned, was a bust in my view.
But what did we learn from this meeting other than how not to throw one of these shindigs? Plenty, in my opinion. However, I will only focus my comments on points which I feel are relevant to the healthcare industry.
One topic that seemed to be coming out as more of an issue is the rising cost of health care itself. One commentator this week said that healthcare costs are rising at twice the annual rate of inflation. (Sorry, I didn’t record the attribution.) Healthcare insurance providers such as WellPoint justify their recent premium increases with this argument. (See http://www.nytimes.com/2010/02/25/health/policy/25health.html?sudsredirect=true ). I’ve also noticed that the media is giving more coverage to this topic as well. CNN’s Dr. Sanjay Gupta had an interesting piece yesterday where he went through the costs of the materials used in his operating room. (See http://www.cnn.com/video/#/video/health/2010/02/24/gupta.medical.cost.breakdown.cnn ). As Dr. Gupta shows, seemingly minor objects quickly become very expensive and it all adds up.
Different reasons are given for rising healthcare costs. Some cite the rising cost of malpractice insurance for doctors and hospitals. Others talk about the rising costs of research and development, in particular, the costs and time associated with getting new drugs through the FDA’s regulatory process. Like most things in life, there’s probably no one answer here. All the points noted here and many more not are going to be responsible.
As I’ve blogged recently, I believe that something more fundamental going on here with healthcare in the United States. The validity of the free market system in dealing with these issues is at stake here along with the government’s role in the lives of its citizens. I’ll be blogging more about this as we go through this year.
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
I caught some of the U.S. Healthcare Summit on the evening news and I found it worrying for three principle reasons. First, the theatricality of it all was discouraging. I lost track of the number of copies of proposed healthcare legislation that had been trucked into the conference room by the Republicans to make some point or other. (I wonder if the environmentalists will calculate how many trees were killed to make those points.) Next, the lack of seriousness by many of the participants seemed obvious to me. Yes, there were many pious sounding talking points and other sound bites but too many participants were there only to be seen in front of the cameras. Finally, the lack of any obvious solution or solutions was apparent to me. There seemed to be even a lack of agreement as to what the problem is. Overall, President Obama’s Healthcare Summit, however well intentioned, was a bust in my view.
But what did we learn from this meeting other than how not to throw one of these shindigs? Plenty, in my opinion. However, I will only focus my comments on points which I feel are relevant to the healthcare industry.
One topic that seemed to be coming out as more of an issue is the rising cost of health care itself. One commentator this week said that healthcare costs are rising at twice the annual rate of inflation. (Sorry, I didn’t record the attribution.) Healthcare insurance providers such as WellPoint justify their recent premium increases with this argument. (See http://www.nytimes.com/2010/02/25/health/policy/25health.html?sudsredirect=true ). I’ve also noticed that the media is giving more coverage to this topic as well. CNN’s Dr. Sanjay Gupta had an interesting piece yesterday where he went through the costs of the materials used in his operating room. (See http://www.cnn.com/video/#/video/health/2010/02/24/gupta.medical.cost.breakdown.cnn ). As Dr. Gupta shows, seemingly minor objects quickly become very expensive and it all adds up.
Different reasons are given for rising healthcare costs. Some cite the rising cost of malpractice insurance for doctors and hospitals. Others talk about the rising costs of research and development, in particular, the costs and time associated with getting new drugs through the FDA’s regulatory process. Like most things in life, there’s probably no one answer here. All the points noted here and many more not are going to be responsible.
As I’ve blogged recently, I believe that something more fundamental going on here with healthcare in the United States. The validity of the free market system in dealing with these issues is at stake here along with the government’s role in the lives of its citizens. I’ll be blogging more about this as we go through this year.
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
Sunday, February 21, 2010
Healthcare Reform: What’s Next?
I’m finding the current spate of political infighting over U.S. healthcare reform to be probably the most fascinating that I’ve ever seen. What’s more, I think that we could see fundamental changes in this country unlike any before in our history. Here’s way.
First, healthcare costs are spiraling out of control. I’m not sure why. I know that my primary care physician knows that he’s not profiting. A very competent professional in his early fifties, he claims to be making only 60% of what he expected to when he graduated from medical school. He blames rapacious health insurers. Recent health insurance increases (http://www.marketwatch.com/story/health-care-shocker-policy-premium-goes-up-69-2010-02-19?reflink=MW_news_stmp ) by some providers were justified because of healthcare costs, such as excessive testing by physicians, were rising. Some providers said that the loss of premium paying customers because of tough economic times caused them to raise the rates of their remaining ones. That kind of beggar thy neighbor (or, customers in this case) never works long term. Interestingly, on last evening’s news, one provider told a correspondent that they were running at a loss and angry about being lumped by a critical President Obama in with firms earning record profits and still increasing rates. My ignorance in this matter doesn’t bother me, I’m obviously in good company. What does bother me is the complete lack of any understanding by anyone as to what the root cause of the problem is. The resources that are consumed here won’t be available to reinvest in the economy.
Next, the growing U.S. national debt is going to limit the government’s options in addressing the problem. Check out the U.S. Debt Clock (http://www.usdebtclock.org/ ) to see some really scary numbers. A Federal government unable to afford any sort of healthcare reform, even smaller, affordable, initiatives may find itself thrown back on policy reforms only, or, even marginalized. Worse case, the U.S. standard of living could begin an irreversible decline for the first time in history.
Finally, the coming conflict between free enterprise and the public welfare as represented by a national healthcare policy. With limited resource available, the public will begin to resent for profit organizations (i.e., businesses) taking away monies which could have been used to provide healthcare services. Big Pharma will eventually have to explain why when they use volume purchasing to drive down suppliers’ profits, it’s capitalism, but, when the government tries to do it with prescription medicines it’s socialism.
So, there’s a lot going on here. Unfortunately, no silver bullet exists for this situation. I don’t believe that this is just a simple government funding debate going on here like we’re seen before. We may be seeing some fundamental changes to the American way of life coming out of this. And, the healthcare industry is going to have to figure out how to deal with this.
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
First, healthcare costs are spiraling out of control. I’m not sure why. I know that my primary care physician knows that he’s not profiting. A very competent professional in his early fifties, he claims to be making only 60% of what he expected to when he graduated from medical school. He blames rapacious health insurers. Recent health insurance increases (http://www.marketwatch.com/story/health-care-shocker-policy-premium-goes-up-69-2010-02-19?reflink=MW_news_stmp ) by some providers were justified because of healthcare costs, such as excessive testing by physicians, were rising. Some providers said that the loss of premium paying customers because of tough economic times caused them to raise the rates of their remaining ones. That kind of beggar thy neighbor (or, customers in this case) never works long term. Interestingly, on last evening’s news, one provider told a correspondent that they were running at a loss and angry about being lumped by a critical President Obama in with firms earning record profits and still increasing rates. My ignorance in this matter doesn’t bother me, I’m obviously in good company. What does bother me is the complete lack of any understanding by anyone as to what the root cause of the problem is. The resources that are consumed here won’t be available to reinvest in the economy.
Next, the growing U.S. national debt is going to limit the government’s options in addressing the problem. Check out the U.S. Debt Clock (http://www.usdebtclock.org/ ) to see some really scary numbers. A Federal government unable to afford any sort of healthcare reform, even smaller, affordable, initiatives may find itself thrown back on policy reforms only, or, even marginalized. Worse case, the U.S. standard of living could begin an irreversible decline for the first time in history.
Finally, the coming conflict between free enterprise and the public welfare as represented by a national healthcare policy. With limited resource available, the public will begin to resent for profit organizations (i.e., businesses) taking away monies which could have been used to provide healthcare services. Big Pharma will eventually have to explain why when they use volume purchasing to drive down suppliers’ profits, it’s capitalism, but, when the government tries to do it with prescription medicines it’s socialism.
So, there’s a lot going on here. Unfortunately, no silver bullet exists for this situation. I don’t believe that this is just a simple government funding debate going on here like we’re seen before. We may be seeing some fundamental changes to the American way of life coming out of this. And, the healthcare industry is going to have to figure out how to deal with this.
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
Monday, February 15, 2010
Healthcare Reform: Where’d It Go?
I’ve been a little distracted lately (busy Holidays, snowstorms, colds) but I stopped the other day and U.S. healthcare reform was gone. Poof! Not there anymore. Now, Larry always kids me (you are kidding Larry, aren’t you?) that when distracted I can miss a lot. But, I must’ve had one heck of a lot better New Year’s Eve than I’d realized.
I went to my usual haunts to see if anyone had any perspective on this. Mike Huckman at CNBC (http://www.cnbc.com/id/15837675 ) and Pharmalot (http://www.pharmalot.com/ ) didn’t mention it. (My apologies if they did and I missed it.)
OK, don’t worry, I’m not going to drag this out. I had heard about Scott Brown’s (http://www.brownforussenate.com/ ) election in Massachusetts. (Ted Kennedy’s old seat no less.) The irony of that victory has not been lost on me. I wasn’t as much surprised by Brown’s victory as how the national discussion on healthcare reform has practically shut down. Despite some noises from Nancy Pelosi and other supporters, there’s virtually nothing compared to prior to Congress’s late Christmas Eve recess.
What’s going on here? Further, what does it mean for Big Pharma? I’m going to go out on a limb here with my views.
First, the Democrats obviously couldn’t arrive at a consensus within their own party about what healthcare reform was all about. (I’m not going to go into the political missteps that cost them Ted Kennedy’s seat.) There were no killer ideas. What began as a high minded crusade to overhaul healthcare in America became a mad, undignified dash for the finish line replete with all sorts of cloakroom deals to make it all happen. No one had any reason to cross the aisle or to worry about why they hadn’t. I suspect that President Obama is probably relieved that he no longer has the Supermajority for this one. We just don’t have any good ideas to implement major healthcare reform. Consensus on smaller issues like tort reform or health insurance regulation may be possible but that’s going to be it for now. We may see this happen as the November midterm elections draw near.
Next, what about Big Pharma? I don’t think that the current status quo concerning healthcare reform is good for them. The topic isn’t going away. Both sides are going back into their corners to get ready for the next round. Uncertainty prevails. The Tea Party movement will play the role of spoiler this year possibly foretelling what will happen in the 2012 Presidential election. Decisions on future drug development not to mention how capital markets will value these companies are only several of the possible issues here.
I’ll be blogging on this theme for a while. With the Congressional elections coming and the White House trying to find common ground with the Republicans, there will be plenty of good material here.
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
I went to my usual haunts to see if anyone had any perspective on this. Mike Huckman at CNBC (http://www.cnbc.com/id/15837675 ) and Pharmalot (http://www.pharmalot.com/ ) didn’t mention it. (My apologies if they did and I missed it.)
OK, don’t worry, I’m not going to drag this out. I had heard about Scott Brown’s (http://www.brownforussenate.com/ ) election in Massachusetts. (Ted Kennedy’s old seat no less.) The irony of that victory has not been lost on me. I wasn’t as much surprised by Brown’s victory as how the national discussion on healthcare reform has practically shut down. Despite some noises from Nancy Pelosi and other supporters, there’s virtually nothing compared to prior to Congress’s late Christmas Eve recess.
What’s going on here? Further, what does it mean for Big Pharma? I’m going to go out on a limb here with my views.
First, the Democrats obviously couldn’t arrive at a consensus within their own party about what healthcare reform was all about. (I’m not going to go into the political missteps that cost them Ted Kennedy’s seat.) There were no killer ideas. What began as a high minded crusade to overhaul healthcare in America became a mad, undignified dash for the finish line replete with all sorts of cloakroom deals to make it all happen. No one had any reason to cross the aisle or to worry about why they hadn’t. I suspect that President Obama is probably relieved that he no longer has the Supermajority for this one. We just don’t have any good ideas to implement major healthcare reform. Consensus on smaller issues like tort reform or health insurance regulation may be possible but that’s going to be it for now. We may see this happen as the November midterm elections draw near.
Next, what about Big Pharma? I don’t think that the current status quo concerning healthcare reform is good for them. The topic isn’t going away. Both sides are going back into their corners to get ready for the next round. Uncertainty prevails. The Tea Party movement will play the role of spoiler this year possibly foretelling what will happen in the 2012 Presidential election. Decisions on future drug development not to mention how capital markets will value these companies are only several of the possible issues here.
I’ll be blogging on this theme for a while. With the Congressional elections coming and the White House trying to find common ground with the Republicans, there will be plenty of good material here.
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
Wednesday, September 30, 2009
The $1000 Genome
Our esteemed colleague, Dr. Joel Studebaker writes today about The $1000 Genome
The $1000 genome, referring to the cost of sequencing all 3.2 billion bases in a human’s DNA, has long been the goal of new developments in sequencing technology. The cost per base pair for sequencing has been dropping rapidly, almost following a Moore’s Law for genetics. Many believe that the $1000 price will make it attractive to sequence the genomes of many people and that, with many more genome sequences available, analysts will be able to gain new insights into how sequence variations influence health and disease. A recent announcement from a laboratory at Stanford appears to have brought the cost for a human sequence below $50,000.
Since the human genome effort started, the hope has been that comparison of the genomes of patients with particular medical conditions to those of suitable control groups would provide several benefits to pharmaceutical therapy.
1. Genetic variations that occur in DNA coding for proteins or in DNA that regulates production of proteins will point to new targets for therapy.
2. The variations will identify subgroups of patients who would benefit from a drug that would not show a statistically significant effect in a more general population. As in the case of Herceptin, diagnostic tests would be necessary to find the members of these subgroups.
3. The variations will identify patients whose genetic makeup make them more susceptible to adverse side effects that might lead to discontinuation of development if those patients were part of a clinical trial population. The hypersensitivity reaction of patients with a particular HLA type to abacavir is an example. Again, diagnostic tests would identify these patients.
Points 2 and 3 are clearly aspects of personalized medicine, which is a double edged sword for the pharmaceutical industry in that it may lead to more narrowly defined markets as well as to approval of drugs that might not be approved otherwise.
These three considerations were among the reasons for the effort to identify the genetic variations known as single nucleotide polymorphisms (SNPs) in laboratories sponsored by the SNP consortium and in the more recent HapMap (Haplotype Map) project. Despite the availability of over three million SNPS that provide good coverage of the genome, correlation of SNP genotypes with disease conditions has not yet had a wide impact on pharmaceutical development. After several years of SNP studies, the view has emerged that many rare genetic variations may contribute to susceptibility to disease (or efficacy of therapy or to increased risk of adverse reactions). If that view is correct, complete DNA sequences represent a more efficient way than SNP assays to find multiple rare variations that have predictive value.
The $1000 genome, referring to the cost of sequencing all 3.2 billion bases in a human’s DNA, has long been the goal of new developments in sequencing technology. The cost per base pair for sequencing has been dropping rapidly, almost following a Moore’s Law for genetics. Many believe that the $1000 price will make it attractive to sequence the genomes of many people and that, with many more genome sequences available, analysts will be able to gain new insights into how sequence variations influence health and disease. A recent announcement from a laboratory at Stanford appears to have brought the cost for a human sequence below $50,000.
Since the human genome effort started, the hope has been that comparison of the genomes of patients with particular medical conditions to those of suitable control groups would provide several benefits to pharmaceutical therapy.
1. Genetic variations that occur in DNA coding for proteins or in DNA that regulates production of proteins will point to new targets for therapy.
2. The variations will identify subgroups of patients who would benefit from a drug that would not show a statistically significant effect in a more general population. As in the case of Herceptin, diagnostic tests would be necessary to find the members of these subgroups.
3. The variations will identify patients whose genetic makeup make them more susceptible to adverse side effects that might lead to discontinuation of development if those patients were part of a clinical trial population. The hypersensitivity reaction of patients with a particular HLA type to abacavir is an example. Again, diagnostic tests would identify these patients.
Points 2 and 3 are clearly aspects of personalized medicine, which is a double edged sword for the pharmaceutical industry in that it may lead to more narrowly defined markets as well as to approval of drugs that might not be approved otherwise.
These three considerations were among the reasons for the effort to identify the genetic variations known as single nucleotide polymorphisms (SNPs) in laboratories sponsored by the SNP consortium and in the more recent HapMap (Haplotype Map) project. Despite the availability of over three million SNPS that provide good coverage of the genome, correlation of SNP genotypes with disease conditions has not yet had a wide impact on pharmaceutical development. After several years of SNP studies, the view has emerged that many rare genetic variations may contribute to susceptibility to disease (or efficacy of therapy or to increased risk of adverse reactions). If that view is correct, complete DNA sequences represent a more efficient way than SNP assays to find multiple rare variations that have predictive value.
Wednesday, September 16, 2009
Why has Outsourcing Gone Mainstream in the Pharmaceutical-BioPharmaceutical Industry
Gil Roth the Editor of Contract Pharma magazine invited several people to comment about the outsourcing trends in the industry in honor of the magazine's 10th anniversary. I sent him my thoughts and wanted to share them here as well (along with a few additional details):
At a macro level, the largest changes in the last 10 years that have occurred in the Pharmaceutical/Bio-pharmaceutical outsourcing-contracting-consulting space is how it has become totally main stream and in many ways regarded as a necessity to being competitive in a world where the classic Pharmaceutical Industry model no longer works. Layer on top of that what Thomas Friedman of New York Times fame labeled as “The Flat World” and it is no wonder that the outsourcing band wagon is so much the order of the day.
The way Wall Street would put is that this trend is a result of a “secular change”. That change is rooted in failed pipelines, lower R&D productivity, the rapid ascent of generic drugs (over 70% of US prescriptions in 2008), increased government regulations, the acknowledgment about the effectiveness of the sales force, extraordinary expense profiles, a public who will not or cannot appreciate the value of the product, a hostile congress and the advent of significant health-care reform from the Obama administration. By the way, Wall Street has acknowledged these secular changes by stripping much of the "P/E premium" from large pharmaceuticals stock prices and turned them into relatively poor performers.
When you combine those challenges with the enormous advances in technology and communication that enable global research and development and supply chains, an outsourcing strategy is not only prudent, it is a requirement. It is indeed a very straightforward way to lower the costs of doing business. When one adds on the acknowledgment of the demand generated by the rising wealth and demand for health-care from very rapidly developing countries including India and China, the requisite of using outsourcing as a way to enter those markets is on the top agendas of many senior executives in the industry.
While the Pharmaceutical/Bio-pharmaceutical Industry has been a notoriously slow adapter of change (yes, there are lots of reasons, not the least of which are regulatory) compounded by risk adverse cultures, the one thing they are not is naive. Gone are the days of “top line revenue” is the only thing that is of concern of management. Today there is a focus on “The Bottom Line” which includes unit costs, effectiveness and efficiency among the tactics. Sure there are other strategies being deployed, for example we have identified two camps in the industry, the consolidation camp and the diversification camp. The “consolidators” would include the big pharma mega-mergers (Pfizer-Wyeth, Merck-ScheringPlough, etc.) and include even some of the consolidation seen by several large biotechs. When you couple a parallel path by the big CRO's, contract manufactures, consultants, etc., the appeal of awarding large pieces of business functions in either long term contracts and/or joint ventures becomes attractive. In a similar fashion, the “diversifiers” (Sanofi, Novartis, etc.) want to focus on their new business endeavors such as animal health, consumer pharmaceuticals or diagnostics and therefore are far more likely to look at an outsourcing strategy as a natural way to allow management focus to be aimed at their new strategies.
The outlook, in my opinion even more to come with innovative joint ventures, terms and conditions and capabilities which will aid the industry to continue its path toward attractive business results.
At a macro level, the largest changes in the last 10 years that have occurred in the Pharmaceutical/Bio-pharmaceutical outsourcing-contracting-consulting space is how it has become totally main stream and in many ways regarded as a necessity to being competitive in a world where the classic Pharmaceutical Industry model no longer works. Layer on top of that what Thomas Friedman of New York Times fame labeled as “The Flat World” and it is no wonder that the outsourcing band wagon is so much the order of the day.
The way Wall Street would put is that this trend is a result of a “secular change”. That change is rooted in failed pipelines, lower R&D productivity, the rapid ascent of generic drugs (over 70% of US prescriptions in 2008), increased government regulations, the acknowledgment about the effectiveness of the sales force, extraordinary expense profiles, a public who will not or cannot appreciate the value of the product, a hostile congress and the advent of significant health-care reform from the Obama administration. By the way, Wall Street has acknowledged these secular changes by stripping much of the "P/E premium" from large pharmaceuticals stock prices and turned them into relatively poor performers.
When you combine those challenges with the enormous advances in technology and communication that enable global research and development and supply chains, an outsourcing strategy is not only prudent, it is a requirement. It is indeed a very straightforward way to lower the costs of doing business. When one adds on the acknowledgment of the demand generated by the rising wealth and demand for health-care from very rapidly developing countries including India and China, the requisite of using outsourcing as a way to enter those markets is on the top agendas of many senior executives in the industry.
While the Pharmaceutical/Bio-pharmaceutical Industry has been a notoriously slow adapter of change (yes, there are lots of reasons, not the least of which are regulatory) compounded by risk adverse cultures, the one thing they are not is naive. Gone are the days of “top line revenue” is the only thing that is of concern of management. Today there is a focus on “The Bottom Line” which includes unit costs, effectiveness and efficiency among the tactics. Sure there are other strategies being deployed, for example we have identified two camps in the industry, the consolidation camp and the diversification camp. The “consolidators” would include the big pharma mega-mergers (Pfizer-Wyeth, Merck-ScheringPlough, etc.) and include even some of the consolidation seen by several large biotechs. When you couple a parallel path by the big CRO's, contract manufactures, consultants, etc., the appeal of awarding large pieces of business functions in either long term contracts and/or joint ventures becomes attractive. In a similar fashion, the “diversifiers” (Sanofi, Novartis, etc.) want to focus on their new business endeavors such as animal health, consumer pharmaceuticals or diagnostics and therefore are far more likely to look at an outsourcing strategy as a natural way to allow management focus to be aimed at their new strategies.
The outlook, in my opinion even more to come with innovative joint ventures, terms and conditions and capabilities which will aid the industry to continue its path toward attractive business results.
Monday, August 31, 2009
The Great US Healthcare Debate—Is There a Rational Solution?
While this blog normally discusses issues affecting the Pharmaceutical and allied industry sectors, I think that the health care reform being “discussed” in the US is worthy of some focus. It is quite unfortunate that at least to my mind, we in the US are in the midst of a most difficult debate that goes to the very core of what our country and our values are. What is very clear to me is that the “Health care Reform” effort by the Obama administration is an enormous challenge, coated with many mistruths by both sides, wrapped around powerful special interests who are dead set against it, layered with good intentions and poor management and execution. My point is to put a perspective on what I think is going on and what the potential benefits and problems are in solving this enormous problem.
As best as I can tell the following “facts” are known:
Healthcare is expensive consuming arguably between 17-20% of GDP
Healthcare costs are growing disproportionately higher than economic growth
Value for money received as measured against other countries is well below many developed and emerging countries
The quality of service is very uneven with a shortage of primary care physicians and a disproportionately higher concentration of providers (physicians and hospitals) in urban centers
There are over 650,000 doctors serving our population of about 300,000,000 people (1:460)
There are somewhere between 40-50 million uninsured people and several times that number who are underinsured.
Due to the litigious nature of our society, much “defensive” medicine is being practiced and insurance rates for practitioners are very, very expensive and contribute to high healthcare costs.
There is significant fraud and inefficiencies in our current healthcare systems
Healthcare will be rationed by a government based system and the government can't run anything efficiently and furthermore it's more “socialization” of our great country.
The pharmaceutical industry is viewed as gouging the public and making obscene profits
Most of the developed world has a “single payer” systems and while there are many horror stories, by and large the systems work “better” and are more cost effective
There is an enormous concern with the American people about losing existing benefits, excessive costs of a newer system and is it “fair” to provide healthcare to all on an equal basis.
Some issues to consider, at least in my opinion are:
While we vociferously argue about what healthcare is currently like and what it may be, there is no single proposal that is available for discussion.
As an ENT physician in Haymarket, VA said to me, who says that 17-20% is a bad number-if my practice bills $1 million/year, there is 4-5 times that created in goods and services including laboratory tests, hospital visits, diagnostics, etc. Isn't that a great way to stimulate the economy?
Assuming a way was found to include on a somewhat equal basis the 40-50,000,000 uninsured and the multiple of that in underinsured, how do we find the provider capacity (doctors, clinics, hospitals, testing facilities, etc.), the administrative capacity to process the additional workloads and the technology and smarts to manage all of these moving parts?
The thought that healthcare will be rationed is a red herring in that to a large extent, existing insurance companies are determining level and quality of care today. I wonder if they are any more effective and/or efficient than the government would be. By the way as I understand it, the government today does run a world class healthcare business called the Veteran's Administration (VA) which provides outstanding service and has implemented an excellent electronic patient record system (EPRS).
Notably absent from the discussions I have heard is the lack or absence of discussions about reforming malpractice suits and other associated legal issues-could that be because of the previous career choices of many of our Congress and Executive branch.
The Pharmaceutical Industry and its adjacent industry sub-sectors are in the rifle sites of congress, however as we have stated before, with 40-50 million new covered lives and an average spend of $800/year (even $500/year if there is the 40% reduction in spend many discuss), there are billions in incremental revenue available, and in my opinion actually enhanced by the Comparative Effectiveness Scheme.
Your thoughts are as always welcome at larryrothmansblog@gmail.com
As best as I can tell the following “facts” are known:
Healthcare is expensive consuming arguably between 17-20% of GDP
Healthcare costs are growing disproportionately higher than economic growth
Value for money received as measured against other countries is well below many developed and emerging countries
The quality of service is very uneven with a shortage of primary care physicians and a disproportionately higher concentration of providers (physicians and hospitals) in urban centers
There are over 650,000 doctors serving our population of about 300,000,000 people (1:460)
There are somewhere between 40-50 million uninsured people and several times that number who are underinsured.
Due to the litigious nature of our society, much “defensive” medicine is being practiced and insurance rates for practitioners are very, very expensive and contribute to high healthcare costs.
There is significant fraud and inefficiencies in our current healthcare systems
Healthcare will be rationed by a government based system and the government can't run anything efficiently and furthermore it's more “socialization” of our great country.
The pharmaceutical industry is viewed as gouging the public and making obscene profits
Most of the developed world has a “single payer” systems and while there are many horror stories, by and large the systems work “better” and are more cost effective
There is an enormous concern with the American people about losing existing benefits, excessive costs of a newer system and is it “fair” to provide healthcare to all on an equal basis.
Some issues to consider, at least in my opinion are:
While we vociferously argue about what healthcare is currently like and what it may be, there is no single proposal that is available for discussion.
As an ENT physician in Haymarket, VA said to me, who says that 17-20% is a bad number-if my practice bills $1 million/year, there is 4-5 times that created in goods and services including laboratory tests, hospital visits, diagnostics, etc. Isn't that a great way to stimulate the economy?
Assuming a way was found to include on a somewhat equal basis the 40-50,000,000 uninsured and the multiple of that in underinsured, how do we find the provider capacity (doctors, clinics, hospitals, testing facilities, etc.), the administrative capacity to process the additional workloads and the technology and smarts to manage all of these moving parts?
The thought that healthcare will be rationed is a red herring in that to a large extent, existing insurance companies are determining level and quality of care today. I wonder if they are any more effective and/or efficient than the government would be. By the way as I understand it, the government today does run a world class healthcare business called the Veteran's Administration (VA) which provides outstanding service and has implemented an excellent electronic patient record system (EPRS).
Notably absent from the discussions I have heard is the lack or absence of discussions about reforming malpractice suits and other associated legal issues-could that be because of the previous career choices of many of our Congress and Executive branch.
The Pharmaceutical Industry and its adjacent industry sub-sectors are in the rifle sites of congress, however as we have stated before, with 40-50 million new covered lives and an average spend of $800/year (even $500/year if there is the 40% reduction in spend many discuss), there are billions in incremental revenue available, and in my opinion actually enhanced by the Comparative Effectiveness Scheme.
Your thoughts are as always welcome at larryrothmansblog@gmail.com
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